Monetary policy

The Federal Open Market Committee is expected to cut interest rates at its September meeting, which will also provide a new Summary of Economic Projections. Marvin Loh, senior macro strategist at State Street Global Markets, examine the meeting, the SEP and Fed Chair Powell's press conference.

Federal Reserve chair Jerome Powell flagged a recent upward revision to income and savings data as a sign of economic strength. He said the information could factor into the central bank's monetary policy discourse during the Fed's next interest rate meeting in November.

After cutting rates 50 basis points in September, the Federal Open Market Committee meets after Election Day to determine monetary policy. Gary Pzegeo, head of fixed income at CIBC Private Wealth U.S., provides his take on the latest move.

This week, Federal Reserve Gov. Michelle Bowman cast the first dissenting vote at an FOMC meeting in years. On Friday, she explained why the economic data she's seen didn't convince her of the need to cut rates as much as her fellow governors thought.

The move signals the end of the Federal Reserve's battle against runaway inflation in the wake of the COVID-19 pandemic. Fed officials expressed divergent views on further action this year.

The Federal Reserve's preferred measure of inflation held steady at 2.6% for the third month in a row, a positive reading that increases the odds of a September rate cut.

Economists are also forecasting faster and deeper cuts to borrowing costs over the next year, and see the central bank reducing the policy rate from the current 4.5% to 3% by next July.

In his speech at the Federal Reserve's Jackson Hole Economic Symposium, the Fed chair said employment losses are now a bigger risk than elevated inflation.

Over the weekend Republican vice presidential nominee Sen. JD Vance, R-Ohio, said setting interest rates should be a "political decision" with input from elected officials.

Gary Quinzel, vice president of portfolio consulting at Wealth Enhancement Group, gives his views about monetary policy and offers his opinion on the FOMC statement and Fed Chair Jerome Powell's press conference.